The Reader Magazine http://www.readernation.org Sat, 13 Sep 2014 18:13:15 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.2 From A Reader http://www.readernation.org/reader-recommends-youve-been-trumped-the-movie/ http://www.readernation.org/reader-recommends-youve-been-trumped-the-movie/#comments Thu, 11 Sep 2014 20:23:33 +0000 http://www.readernation.org/?p=3289

Mr. Madison Payne, a World War II veteran and US marine who had been at Nagasaki and Hiroshima not long after the atomic bombs fell called The Reader Magazine office and left this message asking to be sent 10 copies of the issue devoted to the abolition of nuclear weapons so that he could “give them to his children and grandchildren”.

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Ellen Brown: Local Governments in Jeopardy; The Fed’s Bizarre New Rules http://www.readernation.org/ellen-brown-local-governments-in-jeopardy-the-feds-bizarre-new-rules/ http://www.readernation.org/ellen-brown-local-governments-in-jeopardy-the-feds-bizarre-new-rules/#comments Mon, 08 Sep 2014 20:01:22 +0000 http://www.readernation.org/?p=4964 In an inscrutable move that has alarmed state treasurers, the Federal Reserve, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, just changed the liquidity requirements for the nation’s largest banks. Municipal bonds, long considered safe liquid investments, have been eliminated from the list of high-quality liquid collateral. assets (HQLA). That means banks that are the largest holders of munis are liable to start dumping them in favor of the Treasuries and corporate bonds that do satisfy the requirement.

Muni bonds fund the nation’s critical infrastructure, and they are subject to the whims of the market: as demand goes down, interest rates must be raised to attract buyers. State and local governments could find themselves in the position of cash-strapped Eurozone states, subject to crippling interest rates. The starkest example is Greece, where rates went as high as 30% when investors feared the government’s insolvency. Sky-high interest rates, in turn, are the fast track to insolvency. Greece wound up stripped of its assets, which were privatized at fire sale prices in a futile attempt to keep up with the bills.

The first major hit to US municipal bonds occurred with the downgrade of two major monoline insurers in January 2008. The fault was with the insurers, but the taxpayers footed the bill.  The downgrade signaled a simultaneous downgrade of bonds from over 100,000 municipalities and institutions, totaling more than $500 billion. The Fed’s latest rule change could be the final nail in the municipal bond coffin, another misguided move by regulators that not only does not hit its mark but results in serious collateral damage to local governments – maybe serious enough to finally propel them into bankruptcy.

Why this unprecedented move by US regulators? It is not because municipal bonds are too risky, since corporate bonds with lower credit ratings are accepted under the new rules. Nor is it that the stricter standard is required by the Basel Committee on Banking Supervision (BCBS), the BIS-based global regulator agreed to by the G20 leaders in 2009. The Basel III Accords set by the BCBS are actually more lenient than the US rules and do not include these HQLA requirements. So what’s going on?

From the Inscrutable, Unaccountable Fed

The rule change was detailed by Pam Martens and Russ Martens in a September 4th article titled “The Fed Just Imposed Financial Austerity on the States.” They write that on September 3rd:

The Federal regulators adopted a new rule that requires the country’s largest banks – those with $250 billion or more in total assets – to hold an increased level of newly defined “high quality liquid assets” (HQLA) in order to meet a potential run on the bank during a credit crisis. In addition to U.S. Treasury securities and other instruments backed by the full faith and credit of the U.S. government (agency debt), the regulators have included some dubious instruments while shunning others with a higher safety profile.

Bizarrely, the Fed and its regulatory siblings included investment grade corporate bonds, the majority of which do not trade on an exchange, and more stunningly, stocks in the Russell 1000, as meeting the definition of high quality liquid assets, while excluding all municipal bonds – even general obligation municipal bonds from states with a far higher credit standing and safety profile than BBB-rated corporate bonds.

This, rightfully, has state treasurers in an uproar. The five largest Wall Street banks control the majority of deposits in the country. By disqualifying municipal bonds from the category of liquid assets, the biggest banks are likely to trim back their holdings in munis which could raise the cost or limit the ability for states, counties, cities and school districts to issue muni bonds to build schools, roads, bridges and other infrastructure needs. This is a particularly strange position for a Fed that is worried about subpar economic growth.

Not Sufficiently Liquid?

In a September 3rd press release, Federal Reserve Governor Daniel K. Tarullo stated that while “most state and municipal bonds are not sufficiently liquid to serve the purposes of HQLA in stressed periods . . . the liquidity of some state and municipal bonds is comparable to that of the very liquid corporate bonds that can qualify as HQLA.” [Cite] Criteria were being developed, he said, for considering these assets. But “it is important to get this final rule adopted now, so that the largest banks can begin to prepare for its implementation on January 1.” In the meantime, muni bonds are in limbo, and it appears that most will still not be accepted as HQLA.

The regulators consider stocks to be more liquid than muni bonds because they are readily traded on the stock market. But as the Martens’ note, stock markets can be quite inaccessible in a crisis. Quoting from the Fed’s own archives on the crash of 1987:

Market makers in the over-the-counter market were not obligated to maintain an orderly market and many withdrew from trading. Delays in processing trades resulted in investors receiving prices very different from what they expected. Many brokers did not answer their phones, leaving investors unable to reach them. Erratic price movements and quotes resulted in frequent lock-ups in the electronic trading system used in the over-the-counter market.

In any case, switching the banks’ holdings from muni bonds to corporate bonds or Treasuries is liable to have little effect in a crash. The stricter rules are supposed to be a defense against bank runs; but in a major derivatives bust and bail-in, the available collateral will go first to the derivatives claimants, through a massive concession to financial institutions in the Bankruptcy Reform Act of 2005. (See my earlier article here.) The FDIC and the depositors are both liable to be out of luck, no matter what form the collateral takes.

The Martens’ conclude:

That the Fed and its regulatory cohorts have to resort to this implausible plan – which crimps the ability of states and localities to raise essential funds to operate – in a strained effort to pretend that they’ve found a means of avoiding another massive bailout of Wall Street in a crisis, is just further proof that the only way to seriously deal with too-big-to-fail banks is to restore the Glass-Steagall Act and break up these complex creatures before they strike again.

Gordon Gekko Goes Muni?

The rule change may not have much effect in a crash, but where it will have a major effect is on the cost of credit, which will increase for municipal governments and decrease for corporate and financial institutions. The result will be to further shift power and financial resources from the public sector to the private sector.

Why would regulators dangerously jeopardize state and local government budgets in this way? Skeptical observers speculate that the intent is to Detroit-ize municipal governments, so that assets can be stripped as is being done in that imperiled city. The international bankers got away with asset-stripping Greece. Why not make the US itself a wholly-owned subsidiary of private banking interests?

If that seems far-fetched, consider what is happening with Argentina, which has been forced into bankruptcy by a US court to satisfy the exaggerated claims of certain hold-out vulture funds. IMF regulators have discussed establishing an international bankruptcy court that could strip a country such as Argentina of its assets, including prime sections of real estate, to pay off the nation’s creditors.

In the US, there is already a trend to force state and municipal governments into austerity measures, if not outright bankruptcy, in order to eliminate labor unions, pension obligations and social services. Bankruptcies can be involuntary, forced by the creditors who caused them. Detroit is the US model. Michigan’s Constitution protects pensions, so the emergency manager appointed by the governor could not unilaterally cut those funds. But in a municipal bankruptcy, a judge would decide the fate of city workers’ pensions, making it an attractive option for banking interests. The oligarchs have long had their eyes on the massive sums represented by the pension funds.

Public Banks to the Rescue?

Whatever the explanation for the Fed’s game-changing move, the vulnerability of state and local governments to unpredictable and unaccountable federal regulators is another strong argument in favor of forming publicly-owned banks. Why be under the thumb of an erratic privately-owned central bank manipulated by Wall Street megabanks now caught in multiple frauds?

Like Eurozone countries, US states cannot print their own currencies. But unlike Eurozone countries, they can borrow from their own public banks, which can create money as credit on their books just as private banks do.

At least, they could if they had their own banks. Only one state – North Dakota – has currently taken advantage of that option. North Dakota is also the only state to have escaped the 2008 credit crisis, sporting a budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest default rate on credit card debt, and one of the lowest foreclosure rates.

True, North Dakota also has oil. But the 2008 crisis happened before oil and gas had made a significant impact on state revenues; and the state was posting a budget surplus all during that period. Other oil and gas states are not doing so well.

Globally, 40% of banks are publicly owned; and they are largely in the BRIC countries – Brazil, Russia, India and China. These countries also escaped the credit crisis largely unscathed.

If state and municipal governments want to protect themselves from the fate of Greece and Detroit, they would do well to follow North Dakota’s lead and form their own publicly-owned banks. And time is of the essence, if they hope to beat the rush before the first US Cyprus-style bail-in consumes the collateral that local governments are counting on to protect their multi-billions in deposits.

_________

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200+ blog articles are at EllenBrown.com.

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Dangerous Unselfishness: Stand with Sanju http://www.readernation.org/dangerous-unselfishness-stand-with-sanju/ http://www.readernation.org/dangerous-unselfishness-stand-with-sanju/#comments Sat, 06 Sep 2014 05:03:39 +0000 http://www.readernation.org/?p=4959

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With your help, we can end child labor by 2020. Be a part of the movement. Take action now. #StandWithSanju

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Federal Judge: BP ‘Grossly Negligent’ in Gulf Oil Disaster http://www.readernation.org/federal-judge-bp-grossly-negligent-in-gulf-oil-disaster/ http://www.readernation.org/federal-judge-bp-grossly-negligent-in-gulf-oil-disaster/#comments Fri, 05 Sep 2014 05:45:29 +0000 http://www.readernation.org/?p=4944

The 2010 oil disaster in the Gulf of Mexico was the result of BP’s “gross negligence” and “willful misconduct,” a federal judge has ruled.

The ruling on Thursday by U.S. District Judge Carl Barbier means the oil giant could be responsible for as much as $18 billion in penalties under the Clean Water Act, as the  Act allows for the maximum fine per barrel of oil discharged to be quadruple the $1,100 per barrel fine when the discharge results from gross negligence or willful misconduct.

Barbier also placed blame on Transocean and Halliburton, though the bulk of the blame was appropriated to BP.  He stated that BP was 67% at fault for the disaster, Transocean was 30% at fault, and Halliburton was 3% at fault.

The New York Times adds:

In a 153-page, densely technical decision, Judge Barbier described how BP repeatedly ignored mounting warning signs that the well was unstable, making decisions that he says were “primarily driven by a desire to save time and money, rather than ensuring that the well was secure.”

Healthy ocean advocacy group Ocean Conservancy welcomed Barbier’s ruling, stating that “BP has spent inordinate amounts of time and money shirking responsibility, pointing fingers at others and downplaying the seriousness of the disaster.” The group also stated that the decision “means more funding available for restoring the Gulf.”

The National Wildlife Federation (NWF) said the ruling was step towards accountability for the disaster that “put people and wildlife in grave danger.”

“Eleven men lost their lives. Bottlenose dolphins, endangered sea turtles and countless species of fish and wildlife perished. Studies have estimated that the oil killed an astonishing 800,000 birds and caused billions of dollars of economic damage,” stated Collin O’Mara, president and CEO of NWF.

“Today’s decision is a critical step towards ensuring that BP is held accountable for the full impacts of the Gulf oil disaster and required to restore the vibrant ecosystem of this national treasure—justice demands nothing less,” O’Mara stated.

Barbier’s ruling on BP’s conduct comes the same week as an announcement that Halliburton had reached a $1.1 billion settlement for its role in the oil disaster, while Transocean reached a settlement last year to pay $1.4 billion in civil and criminal fines and penalties for its role in the worst oil spill in U.S. history.

As the Washington Post notes, the next two parts of the case will determine the amount of oil that was discharged into the Gulf and the total amount in fines.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License and was produced by www.commondreams.org

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Whose Security? How Washington Protects Itself and the Corporate Sector http://www.readernation.org/whose-security-how-washington-protects-itself-and-the-corporate-sector/ http://www.readernation.org/whose-security-how-washington-protects-itself-and-the-corporate-sector/#comments Fri, 05 Sep 2014 05:27:40 +0000 http://www.readernation.org/?p=4936 The question of how foreign policy is determined is a crucial one in world affairs.  In these comments, I can only provide a few hints as to how I think the subject can be productively explored, keeping to the United States for several reasons.  First, the U.S. is unmatched in its global significance and impact.  Second, it is an unusually open society, possibly uniquely so, which means we know more about it.  Finally, it is plainly the most important case for Americans, who are able to influence policy choices in the U.S. — and indeed for others, insofar as their actions can influence such choices.  The general principles, however, extend to the other major powers, and well beyond.

There is a “received standard version,” common to academic scholarship, government pronouncements, and public discourse.  It holds that the prime commitment of governments is to ensure security, and that the primary concern of the U.S. and its allies since 1945 was the Russian threat.

There are a number of ways to evaluate the doctrine.  One obvious question to ask is: What happened when the Russian threat disappeared in 1989?  Answer: everything continued much as before.

The U.S. immediately invaded Panama, killing probably thousands of people and installing a client regime. This was routine practice in U.S.-dominated domains — but in this case not quite as routine. For first time, a major foreign policy act was not justified by an alleged Russian threat.

Instead, a series of fraudulent pretexts for the invasion were concocted that collapse instantly on examination. The media chimed in enthusiastically, lauding the magnificent achievement of defeating Panama, unconcerned that the pretexts were ludicrous, that the act itself was a radical violation of international law, and that it was bitterly condemned elsewhere, most harshly in Latin America.  Also ignored was the U.S. veto of a unanimous Security Council resolution condemning crimes by U.S. troops during the invasion, with Britain alone abstaining.

All routine.  And all forgotten (which is also routine).

From El Salvador to the Russian Border

The administration of George H.W. Bush issued a new national security policy and defense budget in reaction to the collapse of the global enemy.  It was pretty much the same as before, although with new pretexts.  It was, it turned out, necessary to maintain a military establishment almost as great as the rest of the world combined and far more advanced in technological sophistication — but not for defense against the now-nonexistent Soviet Union.  Rather, the excuse now was the growing “technological sophistication” of Third World powers.  Disciplined intellectuals understood that it would have been improper to collapse in ridicule, so they maintained a proper silence.

The U.S., the new programs insisted, must maintain its “defense industrial base.” The phrase is a euphemism, referring to high-tech industry generally, which relies heavily on extensive state intervention for research and development, often under Pentagon cover, in what economists continue to call the U.S. “free-market economy.”

One of the most interesting provisions of the new plans had to do with the Middle East.  There, it was declared, Washington must maintain intervention forces targeting a crucial region where the major problems “could not have been laid at the Kremlin’s door.”  Contrary to 50 years of deceit, it was quietly conceded that the main concern was not the Russians, but rather what is called “radical nationalism,” meaning independent nationalism not under U.S. control.

All of this has evident bearing on the standard version, but it passed unnoticed — or perhaps, therefore it passed unnoticed.

Other important events took place immediately after the fall of the Berlin Wall, ending the Cold War.  One was in El Salvador, the leading recipient of U.S. military aid — apart from Israel-Egypt, a separate category — and with one of the worst human rights records anywhere.  That is a familiar and very close correlation.

The Salvadoran high command ordered the Atlacatl Brigade to invade the Jesuit University and murder six leading Latin American intellectuals, all Jesuit priests, including the rector, Fr. Ignacio Ellacuría, and any witnesses, meaning their housekeeper and her daughter.  The Brigade had just returned from advanced counterinsurgency training at the U.S. Army John F. Kennedy Special Warfare Center and School in Fort Bragg, North Carolina, and had already left a bloody trail of thousands of the usual victims in the course of the U.S.-run state terror campaign in El Salvador, one part of a broader terror and torture campaign throughout the region.  All routine.  Ignored and virtually forgotten in the United States and by its allies, again routine.  But it tells us a lot about the factors that drive policy, if we care to look at the real world.

Another important event took place in Europe.  Soviet president Mikhail Gorbachev agreed to allow the unification of Germany and its membership in NATO, a hostile military alliance.  In the light of recent history, this was a most astonishing concession.  There was a quid pro quo.  President Bush and Secretary of State James Baker agreed that NATO would not expand “one inch to the East,” meaning into East Germany.  Instantly, they expanded NATO to East Germany.

Gorbachev was naturally outraged, but when he complained, he was instructed by Washington that this had only been a verbal promise, a gentleman’s agreement, hence without force.  If he was naïve enough to accept the word of American leaders, it was his problem.

All of this, too, was routine, as was the silent acceptance and approval of the expansion of NATO in the U.S. and the West generally.  President Bill Clinton then expanded NATO further, right up to Russia’s borders.  Today, the world faces a serious crisis that is in no small measure a result of these policies.

The Appeal of Plundering the Poor

Another source of evidence is the declassified historical record.  It contains revealing accounts of the actual motives of state policy.  The story is rich and complex, but a few persistent themes play a dominant role.  One was articulated clearly at a western hemispheric conference called by the U.S. in Mexico in February 1945 where Washington imposed “An Economic Charter of the Americas” designed to eliminate economic nationalism “in all its forms.” There was one unspoken condition.  Economic nationalism would be fine for the U.S. whose economy relies heavily on massive state intervention.

The elimination of economic nationalism for others stood in sharp conflict with the Latin American stand of that moment, which State Department officials described as “the philosophy of the New Nationalism [that] embraces policies designed to bring about a broader distribution of wealth and to raise the standard of living of the masses.” As U.S. policy analysts added, “Latin Americans are convinced that the first beneficiaries of the development of a country’s resources should be the people of that country.”

That, of course, will not do.  Washington understands that the “first beneficiaries” should be U.S. investors, while Latin America fulfills its service function.  It should not, as both the Truman and Eisenhower administrations would make clear, undergo “excessive industrial development” that might infringe on U.S. interests.  Thus Brazil could produce low-quality steel that U.S. corporations did not want to bother with, but it would be “excessive,” were it to compete with U.S. firms.

Similar concerns resonate throughout the post-World War II period.  The global system that was to be dominated by the U.S. was threatened by what internal documents call “radical and nationalistic regimes” that respond to popular pressures for independent development.  That was the concern that motivated the overthrow of the parliamentary governments of Iran and Guatemala in 1953 and 1954, as well as numerous others.  In the case of Iran, a major concern was the potential impact of Iranian independence on Egypt, then in turmoil over British colonial practice.  In Guatemala, apart from the crime of the new democracy in empowering the peasant majority and infringing on possessions of the United Fruit Company — already offensive enough — Washington’s concern was labor unrest and popular mobilization in neighboring U.S.-backed dictatorships.

In both cases the consequences reach to the present.  Literally not a day has passed since 1953 when the U.S. has not been torturing the people of Iran.  Guatemala remains one of the world’s worst horror chambers.  To this day, Mayans are fleeing from the effects of near-genocidal government military campaigns in the highlands backed by President Ronald Reagan and his top officials.  As the country director of Oxfam, a Guatemalan doctor, reported recently,

“There is a dramatic deterioration of the political, social, and economic context.  Attacks against Human Rights defenders have increased 300% during the last year.  There is a clear evidence of a very well organized strategy by the private sector and Army. Both have captured the government in order to keep the status quo and to impose the extraction economic model, pushing away dramatically indigenous peoples from their own land, due to the mining industry, African Palm and sugar cane plantations.  In addition the social movement defending their land and rights has been criminalized, many leaders are in jail, and many others have been killed.”

Nothing is known about this in the United States and the very obvious cause of it remains suppressed.

In the 1950s, President Eisenhower and Secretary of State John Foster Dulles explained quite clearly the dilemma that the U.S. faced.  They complained that the Communists had an unfair advantage.  They were able to “appeal directly to the masses” and “get control of mass movements, something we have no capacity to duplicate.  The poor people are the ones they appeal to and they have always wanted to plunder the rich.”

That causes problems.  The U.S. somehow finds it difficult to appeal to the poor with its doctrine that the rich should plunder the poor.

The Cuban Example

A clear illustration of the general pattern was Cuba, when it finally gained independence in 1959.  Within months, military attacks on the island began.  Shortly after, the Eisenhower administration made a secret decision to overthrow the government.  John F. Kennedy then became president.  He intended to devote more attention to Latin America and so, on taking office, he created a study group to develop policies headed by the historian Arthur Schlesinger, who summarized its conclusions for the incoming president.

As Schlesinger explained, threatening in an independent Cuba was “the Castro idea of taking matters into one’s own hands.”  It was an idea that unfortunately appealed to the mass of the population in Latin America where “the distribution of land and other forms of national wealth greatly favors the propertied classes, and the poor and underprivileged, stimulated by the example of the Cuban revolution, are now demanding opportunities for a decent living.” Again, Washington’s usual dilemma.

As the CIA explained, “The extensive influence of ‘Castroism’ is not a function of Cuban power… Castro’s shadow looms large because social and economic conditions throughout Latin America invite opposition to ruling authority and encourage agitation for radical change,” for which his Cuba provides a model.  Kennedy feared that Russian aid might make Cuba a “showcase” for development, giving the Soviets the upper hand throughout Latin America.

The State Department Policy Planning Council warned that “the primary danger we face in Castro is… in the impact the very existence of his regime has upon the leftist movement in many Latin American countries… The simple fact is that Castro represents a successful defiance of the U.S., a negation of our whole hemispheric policy of almost a century and a half” — that is, since the Monroe Doctrine of 1823, when the U.S. declared its intention of dominating the hemisphere.

The immediate goal at the time was to conquer Cuba, but that could not be achieved because of the power of the British enemy.  Still, that grand strategist John Quincy Adams, the intellectual father of the Monroe Doctrine and Manifest Destiny, informed his colleagues that over time Cuba would fall into our hands by “the laws of political gravitation,” as an apple falls from the tree.  In brief, U.S. power would increase and Britain’s would decline.

In 1898, Adams’s prognosis was realized. The U.S. invaded Cuba in the guise of liberating it.  In fact, it prevented the island’s liberation from Spain and turned it into a “virtual colony” to quote historians Ernest May and Philip Zelikow.  Cuba remained so until January 1959, when it gained independence.  Since that time it has been subjected to major U.S. terrorist wars, primarily during the Kennedy years, and economic strangulation.  Not because of the Russians.

The pretense all along was that we were defending ourselves from the Russian threat — an absurd explanation that generally went unchallenged.  A simple test of the thesis is what happened when any conceivable Russian threat disappeared.  U.S. policy toward Cuba became even harsher, spearheaded by liberal Democrats, including Bill Clinton, who outflanked Bush from the right in the 1992 election.  On the face of it, these events should have considerable bearing on the validity of the doctrinal framework for discussion of foreign policy and the factors that drive it.  Once again, however, the impact was slight.

The Virus of Nationalism

To borrow Henry Kissinger’s terminology, independent nationalism is a “virus” that might “spread contagion.” Kissinger was referring to Salvador Allende’s Chile.  The virus was the idea that there might be a parliamentary path towards some kind of socialist democracy.  The way to deal with such a threat is to destroy the virus and to inoculate those who might be infected, typically by imposing murderous national security states.  That was achieved in the case of Chile, but it is important to recognize that the thinking holds worldwide.

It was, for example, the reasoning behind the decision to oppose Vietnamese nationalism in the early 1950s and support France’s effort to reconquer its former colony.  It was feared that independent Vietnamese nationalism might be a virus that would spread contagion to the surrounding regions, including resource-rich Indonesia.  That might even have led Japan — called the “superdomino” by Asia scholar John Dower — to become the industrial and commercial center of an independent new order of the kind imperial Japan had so recently fought to establish.  That, in turn, would have meant that the U.S. had lost the Pacific war, not an option to be considered in 1950.  The remedy was clear — and largely achieved.  Vietnam was virtually destroyed and ringed by military dictatorships that kept the “virus” from spreading contagion.

In retrospect, Kennedy-Johnson National Security Adviser McGeorge Bundy reflected that Washington should have ended the Vietnam War in 1965, when the Suharto dictatorship was installed in Indonesia, with enormous massacres that the CIA compared to the crimes of Hitler, Stalin, and Mao.  These were, however, greeted with unconstrained euphoria in the U.S. and the West generally because the “staggering bloodbath,” as the press cheerfully described it, ended any threat of contagion and opened Indonesia’s rich resources to western exploitation.  After that, the war to destroy Vietnam was superfluous, as Bundy recognized in retrospect.

The same was true in Latin America in the same years: one virus after another was viciously attacked and either destroyed or weakened to the point of bare survival.  From the early 1960s, a plague of repression was imposed on the continent that had no precedent in the violent history of the hemisphere, extending to Central America in the 1980s under Ronald Reagan, a matter that there should be no need to review.

Much the same was true in the Middle East.  The unique U.S. relations with Israel were established in their current form in 1967, when Israel delivered a smashing blow to Egypt, the center of secular Arab nationalism.  By doing so, it protected U.S. ally Saudi Arabia, then engaged in military conflict with Egypt in Yemen.  Saudi Arabia, of course, is the most extreme radical fundamentalist Islamic state, and also a missionary state, expending huge sums to establish its Wahhabi-Salafi doctrines beyond its borders.  It is worth remembering that the U.S., like England before it, has tended to support radical fundamentalist Islam in opposition to secular nationalism, which has usually been perceived as posing more of a threat of independence and contagion.

The Value of Secrecy

There is much more to say, but the historical record demonstrates very clearly that the standard doctrine has little merit.  Security in the normal sense is not a prominent factor in policy formation.

To repeat, in the normal sense.  But in evaluating the standard doctrine we have to ask what is actually meant by “security”: security for whom?

One answer is: security for state power.  There are many illustrations.  Take a current one.  In May, the U.S. agreed to support a U.N. Security Council resolution calling on the International Criminal Court to investigate war crimes in Syria, but with a proviso: there could be no inquiry into possible war crimes by Israel.  Or by Washington, though it was really unnecessary to add that last condition.  The U.S. is uniquely self-immunized from the international legal system.  In fact, there is even congressional legislation authorizing the president to use armed force to “rescue” any American brought to the Hague for trial — the “Netherlands Invasion Act,” as it is sometimes called in Europe.  That once again illustrates the importance of protecting the security of state power.

But protecting it from whom? There is, in fact, a strong case to be made that a prime concern of government is the security of state power from the population.  As those who have spent time rummaging through archives should be aware, government secrecy is rarely motivated by a genuine need for security, but it definitely does serve to keep the population in the dark.  And for good reasons, which were lucidly explained by the prominent liberal scholar and government adviser Samuel Huntington, the professor of the science of government at Harvard University.  In his words: “The architects of power in the United States must create a force that can be felt but not seen.  Power remains strong when it remains in the dark; exposed to the sunlight it begins to evaporate.”

He wrote that in 1981, when the Cold War was again heating up, and he explained further that “you may have to sell [intervention or other military action] in such a way as to create the misimpression that it is the Soviet Union that you are fighting. That is what the United States has been doing ever since the Truman Doctrine.”

These simple truths are rarely acknowledged, but they provide insight into state power and policy, with reverberations to the present moment.

State power has to be protected from its domestic enemy; in sharp contrast, the population is not secure from state power.  A striking current illustration is the radical attack on the Constitution by the Obama administration’s massive surveillance program.  It is, of course, justified by “national security.” That is routine for virtually all actions of all states and so carries little information.

When the NSA’s surveillance program was exposed by Edward Snowden’s revelations, high officials claimed that it had prevented 54 terrorist acts.  On inquiry, that was whittled down to a dozen.  A high-level government panel then discovered that there was actually only one case: someone had sent $8,500 to Somalia.  That was the total yield of the huge assault on the Constitution and, of course, on others throughout the world.

Britain’s attitude is interesting.  In 2007, the British government called on Washington’s colossal spy agency “to analyze and retain any British citizens’ mobile phone and fax numbers, emails, and IP addresses swept up by its dragnet,” the Guardian reported.  That is a useful indication of the relative significance, in government eyes, of the privacy of its own citizens and of Washington’s demands.

Another concern is security for private power.  One current illustration is the huge trade agreements now being negotiated, the Trans-Pacific and Trans-Atlantic pacts.  These are being negotiated in secret — but not completely in secret.  They are not secret from the hundreds of corporate lawyers who are drawing up the detailed provisions.  It is not hard to guess what the results will be, and the few leaks about them suggest that the expectations are accurate.  Like NAFTA and other such pacts, these are not free trade agreements.  In fact, they are not even trade agreements, but primarily investor rights agreements.

Again, secrecy is critically important to protect the primary domestic constituency of the governments involved, the corporate sector.

The Final Century of Human Civilization?

There are other examples too numerous to mention, facts that are well-established and would be taught in elementary schools in free societies.

There is, in other words, ample evidence that securing state power from the domestic population and securing concentrated private power are driving forces in policy formation.  Of course, it is not quite that simple.  There are interesting cases, some quite current, where these commitments conflict, but consider this a good first approximation and radically opposed to the received standard doctrine.

Let us turn to another question: What about the security of the population? It is easy to demonstrate that this is a marginal concern of policy planners.  Take two prominent current examples, global warming and nuclear weapons.  As any literate person is doubtless aware, these are dire threats to the security of the population.  Turning to state policy, we find that it is committed to accelerating each of those threats — in the interests of the primary concerns, protection of state power and of the concentrated private power that largely determines state policy.

Consider global warming.  There is now much exuberance in the United States about “100 years of energy independence” as we become “the Saudi Arabia of the next century” — perhaps the final century of human civilization if current policies persist.

That illustrates very clearly the nature of the concern for security, certainly not for the population.  It also illustrates the moral calculus of contemporary Anglo-American state capitalism: the fate of our grandchildren counts as nothing when compared with the imperative of higher profits tomorrow.

These conclusions are fortified by a closer look at the propaganda system.  There is a huge public relations campaign in the U.S., organized quite openly by Big Energy and the business world, to try to convince the public that global warming is either unreal or not a result of human activity.  And it has had some impact.  The U.S. ranks lower than other countries in public concern about global warming and the results are stratified: among Republicans, the party more fully dedicated to the interests of wealth and corporate power, it ranks far lower than the global norm.

The current issue of the premier journal of media criticism, the Columbia Journalism Review, has an interesting article on this subject, attributing this outcome to the media doctrine of “fair and balanced.” In other words, if a journal publishes an opinion piece reflecting the conclusions of 97% of scientists, it must also run a counter-piece expressing the viewpoint of the energy corporations.

That indeed is what happens, but there certainly is no “fair and balanced” doctrine. Thus, if a journal runs an opinion piece denouncing Russian President Vladimir Putin for the criminal act of taking over the Crimea, it surely does not have to run a piece pointing out that, while the act is indeed criminal, Russia has a far stronger case today than the U.S. did more than a century ago in taking over southeastern Cuba, including the country’s major port — and rejecting the Cuban demand since independence to have it returned.  And the same is true of many other cases.  The actual media doctrine is “fair and balanced” when the concerns of concentrated private power are involved, but surely not elsewhere.

On the issue of nuclear weapons, the record is similarly interesting — and frightening.  It reveals very clearly that, from the earliest days, the security of the population was a non-issue, and remains so.  There is no time here to run through the shocking record, but there is little doubt that it strongly supports the lament of General Lee Butler, the last commander of the Strategic Air Command, which was armed with nuclear weapons.  In his words, we have so far survived the nuclear age “by some combination of skill, luck, and divine intervention, and I suspect the latter in greatest proportion.” And we can hardly count on continued divine intervention as policymakers play roulette with the fate of the species in pursuit of the driving factors in policy formation.

As we are all surely aware, we now face the most ominous decisions in human history.  There are many problems that must be addressed, but two are overwhelming in their significance: environmental destruction and nuclear war.  For the first time in history, we face the possibility of destroying the prospects for decent existence — and not in the distant future.  For this reason alone, it is imperative to sweep away the ideological clouds and face honestly and realistically the question of how policy decisions are made, and what we can do to alter them before it is too late.

Noam Chomsky is Institute Professor emeritus in the Department of Linguistics and Philosophy at Massachusetts Institute of Technology. Among his recent books are Hegemony or Survival, Failed States, Power Systems, Occupy, and Hopes and Prospects. His latest book, Masters of Mankind, will be published soon by Haymarket Books, which is also reissuing twelve of his classic books in new editions over the coming year. His website is www.chomsky.info.

Follow TomDispatch on Twitter and join us on Facebook and Tumblr. Check out the newest Dispatch Book, Rebecca Solnit’s Men Explain Things to Me.

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Hiroshima Peace Declaration http://www.readernation.org/a-story-for-peace/ http://www.readernation.org/a-story-for-peace/#comments Wed, 03 Sep 2014 18:06:09 +0000 http://www.readernation.org/?p=4924 Summer, 69 years later. The burning sun takes us back to that day. August 6, 1945. A single atomic bomb renders Hiroshima a burnt plain. From infants to the elderly, tens of thousands of innocent civilians lose their lives in a single day. By the end of the year, 140,000 have died. To avoid forgetting that sacred sacrifice and to prevent a repetition of that tragedy, please listen to the voices of the survivors.

Approximately 6,000 young boys and girls died removing buildings for fire lanes. One who was a 12-year-old junior high student at the time says, “Even now, I carry the scars of war and that atomic bombing on my body and in my heart. Nearly all my classmates were killed instantly. My heart is tortured by guilt when I think how badly they wanted to live and that I was the only one who did.” Having somehow survived, hibakusha still suffer from severe physical and emotional wounds.

hiroshima_survivors

“Water, please.” Voices from the brink of death are still lodged in the memory of a boy who was 15 and a junior high student. The pleas were from younger students who had been demolishing buildings. Seeing their badly burned, grotesquely swollen faces, eyebrows and eyelashes singed off, school uniforms in ragged tatters due to the heat ray, he tried to respond but was stopped.

“‘Give water when they’re injured that bad and they’ll die, boy,’ so I closed my ears and refused them water. If I had known they were going to die anyway, I would have given them all the water they wanted.” Profound regret persists.

People who rarely talked about the past because of their ghastly experiences are now, in old age, starting to open up. “I want people to know the true cruelty of war,” says an A-bomb orphan. He tells of children like himself living in a city of ashes, sleeping under bridges, in the corners of burned-out buildings, in bomb shelters, having nothing more than the clothes on their backs, stealing and fighting to eat, not going to school, barely surviving day to day working for gangsters.

Immediately after the bombing, a 6-year-old first grader hovered on the border between life and death. Later, she lived a continual fearful struggle with radiation aftereffects. She speaks out now because, “I don’t want any young people to go through that experience.” After an exchange with non-Japanese war victims, she decided to convey the importance of “young people making friends around the world,” and “unceasing efforts to build, not a culture of war, but a culture of peace.”

The “absolute evil” that robbed children of loving families and dreams for the future, plunging their lives into turmoil, is not susceptible to threats and counter-threats, killing and being killed. Military force just gives rise to new cycles of hatred. To eliminate the evil, we must transcend nationality, race, religion, and other differences, value person-to-person relationships, and build a world that allows forward-looking dialogue.

Hiroshima asks everyone throughout the world to accept this wish of the hibakusha and walk with them the path to nuclear weapons abolition and world peace.

Each one of us will help determine the future of the human family. Please put yourself in the place of the hibakusha. Imagine their experiences, including that day from the depths of hell, actually happening to you or someone in your family. To make sure the tragedies of Hiroshima and Nagasaki never happen a third time, let’s all communicate, think and act together with the hibakusha for a peaceful world without nuclear weapons and without war.

We will do our best. Mayors for Peace, now with over 6,200 member cities, will work through lead cities representing us in their parts of the world and in conjunction with NGOs and the UN to disseminate the facts of the bombings and the message of Hiroshima. We will steadfastly promote the new movement stressing the humanitarian consequences of nuclear weapons and seeking to outlaw them. We will help strengthen international public demand for the start of negotiations on a nuclear weapons convention with the goal of total abolition by 2020.

The Hiroshima Statement that emerged this past April from the ministerial meeting of the NPDI (Non-Proliferation and Disarmament Initiative) called on the world’s policymakers to visit Hiroshima and Nagasaki. President Obama and all leaders of nuclear-armed nations, please respond to that call by visiting the A-bombed cities as soon as possible to see what happened with your own eyes.

If you do, you will be convinced that nuclear weapons are an absolute evil that must no longer be allowed to exist. Please stop using the inhumane threat of this absolute evil to defend your countries. Rather, apply all your resources to a new security system based on trust and dialogue.join12

Japan is the only A-bombed nation. Precisely because our security situation is increasingly severe, our government should accept the full weight of the fact that we have avoided war for 69 years thanks to the noble pacifism of the Japanese Constitution. We must continue as a nation of peace in both word and deed, working with other countries toward the new security system. Looking toward next year’s NPT Review Conference, Japan should bridge the gap between the nuclear-weapon and non-nuclear-weapon states to strengthen the NPT regime. In addition, I ask the government to expand the “black rain areas” and, by providing more caring assistance, show more compassion for the hibakusha and all those suffering from the effects of radiation.

Here and now, as we offer our heartfelt consolation to the souls of those sacrificed to the atomic bomb, we pledge to join forces with people the world over seeking the abolition of the absolute evil, nuclear weapons, and the realization of lasting world peace.

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Ellen Brown: Time to Reboot Finance http://www.readernation.org/you-cant-taper-a-ponzi-scheme-time-to-reboot/ http://www.readernation.org/you-cant-taper-a-ponzi-scheme-time-to-reboot/#comments Sun, 31 Aug 2014 17:21:52 +0000 http://www.readernation.org/?p=4911 One thing to be said for the women now heading the Federal Reserve and the IMF: compared to some of their predecessors, they are refreshingly honest. The Wall Street Journal reported on July 2nd:

Two of the world’s most powerful women of finance sat down for a lengthy discussion Wednesday on the future of monetary policy in a post-crisis world: U.S. Federal Reserve Chairwoman Janet Yellen and International Monetary Fund Managing Director Christine Lagarde. Before a veritable who’s-who in international economics packing the IMF’s largest conference hall, the two covered all the hottest topics in debate among the world’s central bankers, financiers and economists.

Among those hot topics was the runaway shadow banking system, defined by Investopedia as “The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight. The shadow banking system also refers to unregulated activities by regulated institutions.” Examples given include hedge funds, derivatives and credit default swaps.

Conventional banks also engage in “shadow banking.” One way is by using their cash cushion as collateral in the repo market, where they can borrow to invest in the stock market and other speculative ventures. As explained by Bill Frezza in a January 2013 Huffington Post article titled “Too-Big-To-Fail Banks Gamble With Bernanke Bucks”:

If you think [the cash cushion from excess deposits] makes the banks less vulnerable to shock, think again. Much of this balance sheet cash has been hypothecated in the repo market, laundered through the off-the-books shadow banking system. This allows the proprietary trading desks at these “banks” to use that cash as collateral to take out loans to gamble with. In a process called hyper-hypothecation this pledged collateral gets pyramided, creating a ticking time bomb ready to go kablooey when the next panic comes around.

Addressing the ticking time bomb of the shadow banking system, here is what two of the world’s most powerful women had to say:

MS. LAGARDE: . . . You’ve beautifully demonstrated the efforts that have been undertaken . . . in terms of the universe that you have under your jurisdiction. But this universe . . . has generated the creation of parallel universes. And . . . with the toolbox with all the attributes that you have — what can you do about the shadow banking at large? . . .

MS. YELLEN: So I think you’re pointing to something that is an enormous challenge. And we simply have to expect that when we draw regulatory boundaries and supervise intensely within them, that there is the prospect that activities will move outside those boundaries and we won’t be able to detect them. And if we can, we won’t be — we won’t have adequate regulatory tools. And that is going to be a huge challenge to which I don’t have a great answer.

Limited to her tools, there probably is no great answer. All the king’s horses and all the king’s men could not rein in the growth of the shadow banking system, despite the 828-page Dodd-Frank Act. Instead, the derivatives pyramid has continued to explode under its watch, to a notional value now estimated to be as high as $2 quadrillion.

At one time, manipulating interest rates was the Fed’s stock in trade for managing the money supply; but that tool too has lost its cutting edge. Rates are now at zero, as low as they can go – unless they go negative, meaning the bank charges the depositor interest rather than the reverse. That desperate idea is actually being discussed. Meanwhile, rates are unlikely to be raised any time soon. On July 23rd, Bloomberg reported that the Fed could keep rates at zero through 2015.

One reason rates are unlikely to be raised is that they would make the interest tab on the burgeoning federal debt something taxpayers could not support. According to the Treasury’s website, taxpayers pay about $400 billion a year in interest on the federal debt, just as they did in 2006 — although the debt has nearly doubled, from $9 trillion to over $16 trillion.  The total interest is kept low by extremely low interest rates.

Worse, raising interest rates could implode the monster derivatives scheme. Michael Snyder observes that the biggest banks have written over $400 trillion in interest rate derivatives contracts, betting that interest rates will not shoot up. If they do, it will be the equivalent of an insurance company writing trillions of dollars in life insurance contracts and having all the insureds die at once. The banks would quickly become insolvent. And it will be our deposits that get confiscated to recapitalize them, under the new “bail in” scheme approved by Janet Yellen as one of the Fed’s more promising tools (called “resolution planning” in Fed-speak).

As Max Keiser observes, “You can’t taper a Ponzi scheme.” You can only turn off the tap and let it collapse, or watch the parasite consume its food source and perish of its own accord.

Collapse or Metamorphosis?

The question being hotly debated in the blogosphere is, “What then?”  Will economies collapse globally? Will life as we know it be a thing of the past?

Not likely, argues John Michael Greer in a March 2014 article called “American Delusionalism, or Why History Matters.” If history is any indication, governments will simply, once again, change the rules.

In fact, the rules of money and banking have changed every 20 or 30 years for the past three centuries, in an ongoing trial-and-error experiment in evolving a financial system, and an ongoing battle over whose interests it will serve. To present that timeline in full will take another article, but in a nutshell we have gone from precious metal coins, to government-issued paper scrip, to privately-issued banknotes, to checkbook money, to gold-backed Federal Reserve Notes, to unbacked Federal Reserve Notes, to the “near money” created by the shadow banking system. Money has evolved from being “stored” in the form of a physical commodity, to paper representations of value, to computer bits storing information about credits and debits.

The rules have been changed before and can be changed again. Depressions, credit crises and financial collapse are not acts of God but are induced by mechanical flaws or corruption in the financial system. Credit may stop flowing, but the workers, materials and markets are still there. The system just needs a reboot.

Hopefully the next program that gets run will last more than 20 or 30 years. Ideally, we might mimic the ancient Mesopotamians, the oldest and most long-lasting civilization in history, and devise an economic system that lasts for millennia. How they did it, along with some other promising models, will be the subject of another article. For more on this, see The Public Bank Solution.

About Those Derivatives

How to kill the derivatives cancer without killing the patient? Without presuming to have more insight into that question than the head of the Fed or the IMF, I will just list some promising suggestions from a variety of experts in the field (explored in more depth in my earlier article here):

  • Eliminate the superpriority granted to derivatives in the 2005 Bankruptcy Reform Act, the highly favorable protective legislation that has allowed the derivatives bubble to mushroom.
  • Restore the Glass-Steagall Act separating depository banking from investment banking.
  • Break up the giant derivatives banks.
  • Alternatively, nationalize the too-big-to-fail banks.
  • Make derivatives illegal and unwind them by netting them out, declaring them null and void.
  • Impose a financial transactions tax on Wall Street trading.
  • To protect the deposits of citizens and local governments, establish postal savings banks and state-owned banks on the model of the Bank of North Dakota, the only state to completely escape the 2008 banking crisis.

These alternatives are all viable possibilities. Our financial leaders, in conjunction with our political leaders, have continually re-created the web of money and credit that knits our economy together. But they have often taken only their own interests and those of the wealthiest citizens into account, not those of the general public. It is up to us to educate ourselves about money and banking, and to demand a system that is accountable to the people and serves our long-term interests.

___________________________

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200+ blog articles are at EllenBrown.com.

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Propublica: The Best Reporting on California’s Drought http://www.readernation.org/propublica-the-best-reporting-on-californias-drought/ http://www.readernation.org/propublica-the-best-reporting-on-californias-drought/#comments Sat, 30 Aug 2014 05:56:38 +0000 http://www.readernation.org/?p=4904

This year may be the driest in California in half a millennium. These reports explore how the drought is affecting agriculture, business and living conditions in the nation’s most populous state.

After a decade of relatively little rain, California is facing its third year of debilitating drought, and 2014 may be the driest in 500 years. The drought has placed a $44.7-billion-a-year agriculture industry, drinking water for millions of people, and some 204 cities located in high-risk fire zones in jeopardy. In January, California Gov. Jerry Brown declared a drought emergency and in July the California Department of Public Health said at least eight communities could run out of drinking water without state action. The State Water Project also shut off its supply to major urban and agricultural water districts for the first time in its history.

California is the nation’s largest state economy and agricultural producer, and so the state’s well-being affects the entire country. ProPublica has rounded up some of the best reporting on California’s drought, from fallowed farms to “zombie” water projects.

San Jose Mercury News, June 2014 Snowmelt’s path shows impact from Sierra to Pacific

It’s impossible to understand the extent of California’s water crisis without understanding where most of it comes from: snowfall in the Sierra Nevada mountains, which tower east of the state’s central agricultural valley and western coastline. Sierra snowmelt accounts for one-third of California’s water supply, but it is unpredictable. And with snowpack this year at a mere 40 percent of average, shortages are affecting drinking water supplies and hydroelectric power generation, impacting critical fish habitat, and harming industries from agriculture to tourism to chemical manufacturing. This comprehensive mountain-to-sea explainer lays bare the consequences of the drought.

San Jose Mercury News, June 2014 Few farmers immune to impact of epic California drought

Agriculture is the biggest consumer of water in California, and arguably the hardest hit by the drought; this $44 billion industry is set to lose between $2 billion and $7.5 billion this year. As a result the state’s big farms – many of which have faced water shut-offs — are looking to billions of dollars in aid, new groundwater wells that will draw down aquifers, or creative financial plans to buy and sell water rights to ease their pain. They are also hiring fewer farmworkers, meaning some 20,000 people may go without work.

East Bay Express, February 2014  California’s Thirsty Almonds

The drought crisis faced by California farmers is in the spotlight, but less understood is how many of those farmers use the precious water they say they so desperately need. This lengthy exploration of California’s almond industry shows how farmers have invested in a crop that uses more water than almost any other, but which is largely for export and considered a luxury, not a staple. As a result, millions of tons of other crops will be fallowed and lost as water is allocated to keep almond trees alive, potentially bringing food shortages and higher prices to consumers.

Marketplace, July 2014 California farms pumping water to make up for drought

California farmers are making up for drought-induced cuts in their usual water supply by drilling groundwater wells to mine more and more from aquifers beneath the state. The problem is that overpumping dramatically depletes a resource that was once reserved for emergencies, and literally causes the ground to sink across much of the central part of the San Joaquin Valley. California – unlike most of its neighboring water-stressed states – has no oversight and no restrictions on groundwater usage, something the state legislature is now looking to fix.

Bloomberg, March 2014 Can Water Under the Mojave Desert Help Quench California?

Farmers aren’t the only ones turning to groundwater to quench modern demands. A company called Cadiz has been trying since 2008 to tap an aquifer beneath the Mojave Desert and sell the water in the Los Angeles area. The company has been mired in controversy and permitting for years, but the drought combined with the prospect of building a 43-mile pipeline to pump 16.3 billion gallons of water towards Los Angeles each year has kept Cadiz stock on the rise. In May, California courts rejected environmental concerns and cleared the way for the project to continue. Plans like these, because they tend to come back to life only in the midst of a drought, sometimes get coined “zombie” projects.

The Atlantic, February 2014 American Aqueduct: The Great California Water Saga

California’s water comes from two giant, expensive, plumbing systems running hundreds of miles almost the full length of the state. Few systems are more complicated and intertwined with critical environmental habitat, which is why California Gov. Jerry Brown’s proposal to build a $25 billion pumping station to move more water to Southern California and bypass one of the country’s most important waterways has drawn such a fight. The current canal and pump systems arguably drive the state economy and use 5 percent of all California electricity in the process. But their infrastructure is overworked and crumbling. Levees lining the Sacramento River are 50 years old and could collapse in an earthquake. New tunnels might replace some of those antiquated systems, but locals fear they will be used to drain the delta instead of protect it, as the project claims. This Atlantic long-read attempts to untangle what is undeniably one of the most important – and difficult to understand – political battles affecting California’s water.

Associated Press, May 2014 California’s flawed water system can’t track usage

In the West, rights to water were doled out to the first people who settled and claimed it, and those who staked that claim before 1914 are considered so senior in California that their water cannot be curtailed even as the rest of the state grapples with drought. This Associated Press analysis finds that California officials can’t account for how much water nearly 4,000 of those senior water rights holders use – including some of the largest companies and cities in the state – even while they try to assess the state’s total water supply and shut off water to junior rights holders.

Aljazeera America, February 2014 Drought threatens California Wildlife

Life depends on water, and so it should be no surprise that birds, fish and animals important to a thriving ecosystem are also threatened by California’s drought as habitats shrink, breeding grounds are destroyed, parasites and disease spread, and food supplies dwindle. Native fish are especially at risk; 80 percent face extinction by 2100. The news is bad for the environment, and maybe even tougher for politics, since one of the biggest environmental fights in California in decades has been over how to reserve enough water to protect the natural flow of waters into the ocean and keep river deltas full enough to support fish.

Climate Central, August 2013 Yosemite Fire Example of How Droughts Amplify Wildfires

Last summer’s massive Rim Fire near Yosemite National Park was the third-largest wildfire in California history, and stands as just one example of the destructive threat dry times pose to forests and fields. In 2013, an estimated 67,980 acres in California burned. That’s nearly double the five-year average, and firefighters are bracing for worse this year. Research has shown that the number of long-term, large-scale wildfires has significantly increased since the mid-1980s, and correlate with years of above-average temperatures and small snowpack, such as the last three. In fact, the top eight largest wildfires since 1960 have all occurred since 2000.

By Claire Kelloway of ProPublica (www.propublica.org)

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Who Am I? http://www.readernation.org/who-am-i/ http://www.readernation.org/who-am-i/#comments Sat, 30 Aug 2014 05:41:10 +0000 http://www.readernation.org/?p=4901 I am the elephant in the retail living room. Operating 4,500 stores nationwide and employing 1.4 million U.S. workers, I am not only the nation’s largest retail employer; I am America’s largest private employer of any kind. With one in every ten American retail employees working for me, I have the capacity to reshape the landscape for retail work.

So far, I have used this power to lower wages, cut hours, and deny benefits to my workforce, reducing the quality of retail jobs as a whole.  My history of using extreme methods to push down the cost of labor stretches back at least to the 1960s, when the shrewd fellow who got me going set up shell companies to dodge federal minimum wage laws that would have forced him to pay employees $1.15 an hour.  While he was ultimately forced by federal courts to drop the scheme, my continued practice of paying poverty-level wages and operating at the limits of the law to discourage unemployment and workers’ compensation claims and deter employees from working overtime has been well documented.

A 2005 study found that my employees earn 28 percent less, on average, than workers employed by other large retailers.  At the same time, my sheer size and competitive influence exert a downward pressure on wages at other retailers. A study from the University of California finds that my store openings in communities lead to the replacement of better paying jobs with jobs that pay less.  The study concludes that in 2000, retail employees nationwide would have taken home $4.5 billion more in their total paycheck if I had not been around.

Yet I could easily afford to set a different pattern for the retail sector—and, as the country’s most profitable set of shops whose shareholders are among the wealthiest people on Earth, do so without passing any of the costs to customers. The six heirs to my fortune have more wealth than the bottom 42 percent of American families combined, with holdings of almost $90 billion. Since last year, they’ve received more than $1.8 billion in dividend payments.

By raising wages and putting more than $4 billion into the hands of my underpaid workers, I could have a significant impact on retail employment and the overall economy, while taking the lead as a trailblazer for the industry as a whole.

This Who Am I adapted from Catherine Ruetschlin’s Retail’s Hidden Potential (www.demos.org)

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The Final Word http://www.readernation.org/newest-issue-the-final-word/ http://www.readernation.org/newest-issue-the-final-word/#comments Sat, 30 Aug 2014 05:25:15 +0000 http://www.readernation.org/?p=4884 This Issue’s Final Word: In the richest country on earth, millions have been left out in the cold. Why?

 

REV. KATE LORE, HOMELESS FAMILY SOLUTIONS

Around the 80s I noticed there was a change in how we spoke about poor people. We started talking about welfare queens who were taking advantage of taxpayer money and suddenly we started not thinking about the challenges faced by our families but we started blaming the victims of poverty.

I believe our American Dream has turned into an American nightmare.  By falling for the lure of individual success, that we have forgotten our ideals. It’s not just our safety net that’s falling apart. It’s the moral fiber and that’s what happens when we forget to have love and compassion for one another.

JOHN HAINES; EXEC. DIRECTOR, MERCY CORPS

In Oregon, and this is mirrored around the country, about 26% of the population lives in a condition of asset poverty. So that’s one out of four people. If you don’t have income for three months, you’re going to your friends–hopefully you have some friends, right? Or family–maybe you don’t have family nearby. Or public assistance. The resiliency cushion, the economic resiliency of Oregonians and, in fact, nationwide is almost non-existent really.

CHUCK SHEKETOFF; EXEC. DIRECTOR, CENTER FOR PUBLIC POLICY

The social safety net has more holes in it. You have to be significantly poorer today to even get in the door. Okay? For them to consider you. In Oregon, for instance, a three person family whose income exceeds $616 for a month cannot get into the door to be considered for the TANF program. That was set in 1991 when our minimum wage was under $5.00.  And it’s been frozen there ever since. That’s a bad budget priority. It’s a bad choice. And we need to change that.

NICK HANAUER; VENTURE CAPITALIST, AUTHOR OF THE GARDENS OF DEMOCRACY

[We] simply have this problem where no one can afford to buy stuff anymore. Helping a poor family isn’t an act of charity. It’s converting a family that you have to support into a family that can buy things from your company.  Helping the poor is what drives the economy. That’s why all prosperous economies have big middle classes.  Right, that there’s a huge return uh economically, socially and politically in helping poor people.

NICK FISH; HOUSING COMMISSIONER

If capitalism is not regulated or checked, there’s a harsh logic and it will always seek out the lowest costs, highest return, which is why we have historically viewed government as a check and a balance on that. Over the last quarter century, we have reduced regulations, degraded wages, cut back on healthcare. We’ve reduced taxes and now people are more vulnerable. And my job is to communicate to people the absolute moral imperative during these times of using public resources to maintain the safety net until things turn around and to make sure that we don’t throw some of our most vulnerable people essentially to the wolves.

What we have is a system that once someone falls into homelessness we’ve insured that the highest cost service delivery system kicks in. The police officer becomes their case worker. The fire bureau becomes their medical provider. They get their, most of their medical care through emergency room services. What if we actually went upstream and said how do we prevent people from falling into homelessness. How do we make investments upstream so that no one falls into homelessness and what if it turns out it costs a lot less? Now of course we’ve documented all over the country that that’s the case. If we make a small investment then, early on to keep someone in their apartment and avoid all of the dominoes which follow when there’s an eviction, then not only do we save a fortune on the back end, but we keep someone in a healthy place.

BISHOP C.T. WELLS; COMMUNITY SERVICES LEADER

I have never seen a time when there has been as much venom over things that in previous years we agreed on. We’ve always been a nation that would look out for those that needed help. And for the life of me, I don’t understand the response that would say, ‘no, fend for yourself’.  That’s not rooted in the fabric of America.

What does it mean to be in America?  What does it mean to live in this country?  Everybody wants the same thing. We want to be able to live in a place of freedom. Want to be able to live in a place where we have the chance to be the best we can be. That’s why you’re seeing so many other nations appreciate America. Yet we’re throwing it away. And it’s our most powerful asset that we have.

These words are reposted courtesy of Joe and Harry Gantz, filmmaker-producers of the HBO documentary “American Winter”.

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